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I hate hearing this. When the government takes an equity stake in any company, it purchases new shares. Those shares have value. The value goes up or down based on the market value of the company. Yes, the market is sucking today.. that won't be true forever. So, the money hasn't gone anywhere. Granted, it's been -allocated-, but that isn't the same thing.
I say, who cares if it takes 3 trillion dollars to finish recapitalizing the banks? The only losers in that scenario are the (pre-dilution) shareholders of said banks, as is right and proper. They are the owners of the companies that screwed the pooch.. they are supposed to lose money when the companies they own do stupid things.
On the other hand, as new stakeholders in these firms, the USG stands to make a really nice profit, because it's buying into an oversold market.
I was really unhappy with the prospect of offering banks super low interest long term loans-- that really was giving away taxpayers' money. This situation is quite different and much better for the long-term prospects of the government. We're going to need the dividends from those shares in the rough years ahead.
